Objective
- 1.
The objective of this Standard is to set out Disclosure Requirements (DRs) related to consumers and end-users, particularly with respect to the sub-topics specified in paragraph 6 of this Standard. If not all the sub-topics prescribed by this Standard are to be reported following the materiality assessment, paragraph 30 of ESRS 1 General Requirements applies.
- 2.
The sustainability statement shall provide information in relation to ESRS S4 Consumers and End-users if this topic relates to material impacts, risks and opportunities. Such information shall cover all the reporting areas listed in paragraph 5 of ESRS 1 General Requirements.
- 3.
The DRs in this Standard complement the provisions in ESRS 2 General Disclosures, which require the undertaking to disclose information about topics related to material impacts, risks and opportunities, in particular:
- 5.
This Standard takes account of the international and European human rights instruments and conventions, including the International Bill of Human Rights, the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises.
- 6.
This Standard sets out DRs with respect to the following sub-topics:
- (a)
information-related impacts on consumers and end-users (including privacy, access to information, freedom of expression);
- (b)
personal safety of consumers and end-users (including health and safety, protection of children, security of a person); and
- (c)
social inclusion of consumers and end-users (including access to products and services, responsible marketing practices, non-discrimination).
Interaction with other topical ESRS
- 8.
Social and environmental topics interact with each other. The points of interaction between ESRS S4 Consumers and End-users and the other topical standards are the following:
- (a)
all the social standards, i.e. ESRS S1 Own Workforce, ESRS S2 Workers in the Value Chain, ESRS S3 Affected Communities, ESRS S4 Consumers and End-users, are aligned in terms of content and structure and are related to each other. The disclosures in the social standards address material information needed for reporting on impacts on people, risks and opportunities related to each stakeholder group, including in relation to sustainability due diligence;
- (b)
this Standard interacts with ESRS E1 Climate Change to the extent that the transition to a low-carbon and climate-resilient economy can give rise to material impacts, risks or opportunities with regard to consumers and end-users; and
- (c)
this Standard interacts with ESRS E5 Resource Use and Circular Economy to the extent that consumers and end-users are informed about the resource use, waste management or circular economy aspects of the products or services they buy.
Disclosure Requirements
Impacts, risks and opportunities management
Disclosure Requirement S4-1 – Policies related to consumers and end-users
- 9.
The undertaking shall describe its policies for managing material impacts, risks and opportunities related to consumers and end-users in accordance with ESRS 2 GDR-P. It shall state whether these policies cover specific groups (for example, particular age groups) or all consumers and end-users.
APPLICATION REQUIREMENTS – ARs
- AR 1
for para. 9 (Policies related to consumers and end-users)
Examples of policy aspects to disclose are the means of communication the undertaking uses to communicate its policies to the individuals, groups of individuals or entities for whom they are relevant, either because they are expected to implement them (for example, the undertaking’s employees, contractors and suppliers) or because they have a direct interest in their implementation.
Disclosure Requirement S4-2 – Engagement with consumers and end-users, existence of channels for consumers and end-users to raise concerns or needs and approaches to remedy
- 10.
The objective of this DR is to enable an understanding of the undertaking’s general approach to engagement with consumers and end-users, including the availability of channels to raise concerns or needs such as grievance mechanisms, and its approach to remedy.
- 11.
The undertaking shall disclose how it engages directly with consumers and end-users, their legitimate representatives, or with credible proxies, and how the perspectives of consumers and end-users inform its decisions or activities aimed at managing the actual and potential impacts on consumers and end-users during the reporting year. This shall include how the undertaking gains insight into the perspectives of consumers and end-users who may be particularly vulnerable to impacts and/or who are marginalised (for example, persons with disabilities, children) if the undertaking takes action to understand those perspectives.
- 12.
The undertaking shall describe the channels available to consumers and end-users to bring their concerns or needs directly to its attention and have them addressed. In particular, it shall state whether it has a grievance mechanism in place. It shall also explain how it assesses the effectiveness of these channels.
- 13.
The undertaking shall describe its general approach to and processes to provide or cooperate in remediation where it has caused or contributed to a material negative impact on consumers and end-users.
APPLICATION REQUIREMENTS – ARs
- AR 3
for para. 12 (Grievance mechanism)
The ‘effectiveness criteria for non-judicial grievance mechanisms’, as laid out in the UN Guiding Principles on Business and Human Rights, in particular Principle 31, can be used for assessing the effectiveness of the channels.
If the undertaking has policies for protecting individuals that use these channels against retaliation, and they are disclosed under ESRS G1-1, the undertaking may refer to that disclosure.
Disclosure Requirement S4-3 – Actions and resources related to consumers and end-users
- 14.
The undertaking shall describe the key actions and resources used to manage its material positive and negative impacts, risks and opportunities related to consumers and end-users in accordance with ESRS 2 GDR-A.
- 15.
In relation to material negative impacts on consumers and end-users, the undertaking shall describe:
- (a)
its key actions taken, planned or underway to prevent, mitigate, bring to an end, minimise and remediate material negative impacts on consumers and end-users, including its approach in situations where tensions arise between such actions and other business pressures (for example, practices related to marketing, sales and data use); and
- (b)
how it tracks and assesses the effectiveness of these actions in delivering outcomes for consumers and end-users. This disclosure can be omitted if the undertaking discloses how it tracks the effectiveness of its actions in accordance with ESRS 2 GDR-T or GDR-M. In that case, a reference to that disclosure is sufficient.
- 16.
For the sub-topics assessed as material for this Standard, subject to relevant privacy regulation, the undertaking shall disclose human rights incidents connected to its consumers and end-users identified in the reporting period.
APPLICATION REQUIREMENTS – ARs
- AR 4
for para. 15 (Key actions)
The actions taken by the undertaking differ depending on its connection to the impact, and how it has identified the actions as appropriate for addressing material impacts.
This disclosure requirement also applies to key actions to provide, cooperate in, or enable remediation in cases of actual negative impacts. Key actions to prevent, mitigate, bring to an end, minimise or remediate impacts include the use of different types of leverage and/or collective actions taken through multi-stakeholder and/or industry initiatives.
- AR 5
for para. 16 (Human rights incidents)
The human rights incidents in scope for this disclosure are those that relate to not respecting internationally recognised human rights as defined in Directive (EU) 2022/2464 (CSRD), Art. 29b (2) (b) (iii). These incidents are understood as the substantiated instances registered by the undertaking of:
- (a)
judicial and non-judicial proceedings (such as cases before domestic courts and tribunals, mediation, complaints filed with the National Contact Points for OECD Multinational Enterprises); and
- (b)
other incidents, including those it identified through its internal processes.
For the purpose of this disclosure, only substantiated and verified instances are to be reported. An instance is substantiated when it is evidenced by objective, factual and verifiable information. An instance is verified when a Court, the OECD or an administrative authority has made a formal finding that the instance occurred. Not all ongoing judicial or non-judicial proceedings, and not all other instances registered by the undertaking, are necessarily substantiated instances.
- AR 6
for para. 16 (Human rights incidents)
When applying the filter of information materiality (paragraph 23 of ESRS 1 General Requirements) to the information about incidents referred to under paragraph 16, the undertaking's assessment is primarily based on the severity of the impacts on consumers and end-users.
- AR 7
for para. 16 (Human rights incidents)
The undertaking is not expected to disclose a list of each human rights incident, and may aggregate the information provided, such as by relevant types of incidents and consumers and end-users affected.
- AR 8
for para. 16 (Cross-referencing)
If the undertaking considers that changes in human rights incidents are relevant for understanding the effectiveness and availability of channels to raise concerns or needs, including grievance mechanisms, it may cross-reference to paragraph 16 and paragraph 12.
The way the undertaking has addressed or is addressing human rights incidents may be cross-referenced to information disclosed in accordance with paragraph 15.
Metrics and Targets
Disclosure Requirement S4-4 – Targets related to consumers and end-users
- 17.
The undertaking shall disclose qualitative and/or quantitative targets related to consumers and end-users in accordance with ESRS 2 GDR-T.
APPLICATION REQUIREMENTS – ARs
- AR 9
for para. 17 (Tracking performance)
Engagement with consumers and end-users, their legitimate representatives, or with credible proxies, can inform the undertaking’s tracking and assessment of the effectiveness of its actions disclosed under paragraph 15 (b), including the development of metrics, target-setting and/or tracking of performance against those metrics and targets.
In particular, in relation to the tracking of performance, such engagement can inform the understanding of the effectiveness of the undertaking’s management of material negative impacts and the identification of lessons learnt or improvements.